Planning Briefs
Gimme Tax Shelter! Find It At Home
Published Friday, May 24, 2013 at: 7:00 AM EDT
Despite recent tax law changes that have chipped away at some of the benefits, a home remains a top tax shelter for homeowners, as well as a prime investment opportunity. Let’s briefly review the basics.
Current deductions: The tax law generally allows you to deduct property taxes on a home you own as well as mortgage interest paid on the first $1 million of debt used to acquire the home. In addition, you may be able to deduct the interest on up to $100,000 of home equity debt, regardless of how you used the proceeds (when permitted by state law). These deductions may offset some of the everyday expenses of owning a home.
However, certain itemized deductions—including those for property taxes and mortgage interest—are reduced by 3% of the amount of adjusted gross income (AGI) in 2016 exceeding $259,400 for single filers and $311,300 of AGI for joint filers (but the reduction can be no more than 80% overall).
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